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Bank Default Breaks Free After 3 Months of Fall & Jumps to 13.44%

24/06/2014 – Cinco Dias

In April, default on loans granted to individual consumers and SMEs by banks, co-ops and savings banks have rebounded to 13.44% after three months of continuous decline, if considered in line with a change in classification where the Lending Establishments (EFC in Spain) have been excluded from the credit entities category.

According to the Bank of Spain, the default rate advanced from 13.38% registered in March to 13.44% in April. However, the total value of soured loans declined by over €1 billion to €191.76 billion.

Without the classification amendment, the April default would show 13.67% (13.62% in March). The credit balance would decrease from €1.414 billion in March to €1.401 billion the following month.

The default in banks shrank considerably between December 2012 and February 2013 due to the toxic asset transfer to Sareb, first from the nationalized banks (Bankia, NCG Banco and Catalunya Caixa) and then from the entities from the 2nd group (Ceiss, BMN and Caja3).

 

Original article: Cinco Días

Translation: AURA REE